Mortgage holders in England and Wales are at risk of being caught out by interest rate rises as a recent survey revealed almost half admit to being uncertain of the rate charged on their existing mortgage.
The survey of 1000 mortgage holders from England and Wales carried out by Principality Building Society found that while 87 per cent are able to state the amount of their monthly mortgage repayment, only 52 per cent know with certainty the interest rate of their current mortgage.
Almost a quarter of mortgage holders were unaware that a rise in the Bank of England base rate would ultimately be bad news for mortgage holders.
In fact, five per cent wrongly believed a rise in Bank of England rates would actually be good news for mortgage holders.
Julie-Ann Haines, customer director at Wales’ largest building society, comments:
“We would encourage you to take time now to get to know your rate and the finer details of your mortgage so you find out about increases in your monthly payment before Bank of England rates increase.
“We are expecting a rise in the Bank of England base rate in the next few months but this is likely to be a very small rise occurring most probably in the first quarter of 2015.
“In real terms, a quarter per cent rise on the estimated average mortgage of £113,549 equates to around an extra £23.66 a month or less than £6 per week – which should be manageable for the majority. However, rates will differ depending on the amount you have borrowed and period you have borrowed it for.
“Over the course of the next few years base rates are expected to increase further so homeowners should do the calculation on an online mortgage calculator or speak to their mortgage adviser to estimate what a larger rise may mean for you.
“But the key to responsible mortgage management is to be on the front foot, know your product and anticipate any change in rate before you see its impact on your bank statement. It’s tough to do that if you don’t know your rate in the first place.”
Loading ...